September 30, 2021
The Royal Monetary Authority (RMA), Bhutan’s central bank, has teamed with Ripple to begin testing a model of its central bank digital currency (CBDC) based on Ripple’s technology. To cover comparable use cases, the test will employ Ripple’s own CBDC private ledger. For the proposed CBDC, the pilot test will incorporate retail, cross-border, and wholesale payments. The tests will be conducted by Bhutan’s official bank, the Royal Monetary Authority (RMA).
This pilot provides yet another example of a country approaching the digital currency world as a way of improving access for citizens to financial services. In this regard, Bhutan expects these actions to increase the accessibility of its citizenship to the financial market by 85% by 2023. Yangchen Tshogyel, deputy governor of the Royal Monetary Authority of Bhutan, stated they chose Ripple because it may allow them to use their existing infrastructure. Tshogyel stated: Ripple’s groundbreaking technology will allow for the experimentation of a CBDC with our existing payments infrastructure — while ensuring efficient and cost-effective cross-border transfers.
While Ripple has been touted as the go-to platform for remittances and bank-related applications — and even as a SWIFT replacement of sorts — this is the first time it has been involved in a test of a CBDC. However, this test is not using Ripple’s public ledger. The test is taking advantage of another Ripple technology called CBDC private ledger, which was introduced by the company in March.
James Wallis, VP of Central Bank Engagements at Ripple, stated: We couldn’t be more thrilled to partner with the RMA on its CBDC agenda and foster our shared values in creating a more sustainable, accessible, and financially inclusive reality.
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